On Windows XP Pro SP3, you did not say if it's pro or home, but, on Pro, run the network connection wizard, and enable file sharing in there, this is important so that xp pro's firewall is configured to allow file sharing, and, like grouter said, the XP Pro machine user must have a password set.
Then, in your TCPIP connection settings on the XP Pro machine, turn on Allow NetBios over TCP/IP, this will make name lookup on the local network much faster.
If you need help finding these things, ask.